Mumbai (Commodities Control) – Cotton #2 dipped 13 points lower for the week ended 2nd October, after a positive closing in the previous week. This happens to be the first weekly decline in three. However the fibre not only posted its fourth consecutive monthly gain in September, but also ended positive for the second straight quarter.
Having said so, ICE cotton futures fell on Friday on market uncertainty after the U.S. President Donald Trump tested positive for COVID-19. Trump said on Friday that he and his wife, Melania, had tested positive for COVID-19.
Cotton contracts for December closed at 65.82 cents, down 9 points. October Cotton closed at 64.52 cents, down 9 points. March 21 Cotton closed at 66.63 cents, down 7 points. Dec’20-Mar’21 spread stood at 81 points vs 71 points last week.
Global equity markets slumped and oil prices dipped after Trump's positive test news. The dollar firmed and further weighed on the natural fiber.
The COVID-19 pandemic, which has infected more than 34 million people globally, has upended markets and economic activity, pushing cotton prices down over 6% this year.
"The recent flare up in COVID cases in many parts of the world, persistent layoffs and insolvencies, and the delay of more stimulus are pointing to a rough patch ahead for the global economy," British merchant Plexus Cotton said in a note on Thursday.
The recent week was nearly as choppy as the week prior. The most-active contract on ICE raw cotton was supported by robust sales data, retreating dollar and technical buys, but the gains were limited by harvest pressure and slide in financial markets along with crude oil.
In its weekly export sales report, the U.S. Department of Agriculture reported net sales of 233,800 running bales (RB) for 2020/21, that was 152% above last week and 51% higher yr/yr. Of the total, 55,700 RB were for China. The report also showed that exports of 218,200 RB were down 23% from the prior week, with 105,400 RB shipped to China. The United States is one of the biggest producers of natural fiber while China is one of the largest consumers.
Meanwhile, the U.S. Department of Agriculture's weekly crop progress data, on Monday, showed that 13% of the cotton crop was harvested in the United States as of the week ended Sept. 27, up from 11% in the preceding week. However, the report also showed that only 43% of cotton was in good/excellent condition, down from 45% in the preceding week.
Meanwhile, CFTC data showed cotton speculators were 51,128 contracts net long on September 29. That was down just 183 contracts on minimal new selling interest. This happened due to a rise of 22 contracts in the longs, along with simultaneous rise in short positions by 205 contracts. The open interest for the week ended September 29 was registered at 263,051, up 74.
Experts note that amid all the recovery being witnessed in the consuming markets, cotton continues to derive majority of its strength from speculative and index fund buying.
They expect the sideways trend to continue in the market for a bit more.
Meanwhile, Indian cotton prices this week were generally steady in North India, Gujarat, Madhya Pradesh and South Indian states of Andhra, Telangana and Karnataka amid weak mill demand and rising arrivals.
Meanwhile in its official estimates for cotton crop and sowing, the Indian Textile Ministry’s Committee on Cotton Production and Consumption has projected India’s cotton production of 357 lakh bales for the year 2019-20, with a rise of about 2% in the yield at 453.82 kg per hectare as against 444.74 kg last year.
In its latest update, GoI reported about 130.37 lakh ha area coverage under cotton as compared to last year (127.67 lakh ha). Thus 2.70 lakh ha more area has been covered compared to last year. Higher area is reported from the States of Telangana (5.70 lakh ha), Karnataka (1.06 lakh ha), Punjab (0.99 lakh ha), Rajasthan (0.53 lakh ha), Haryana (0.36 lakh ha), Madhya Pradesh (0.35 lakh ha) and Odisha (0.02 lakh ha). Less area is reported from the States of Gujarat (3.88 lakh ha), Maharashtra (1.71 lakh ha), Andhra Pradesh (0.55 lakh ha) and Tamil Nadu (0.18 lakh ha).
Support and Resistance for Cotton #2 lies at 65.12 cents and 66.26 cents per lb, respectively.
0 Comments 
Post Comment 
